AUSA concerned over military pay and benefits 

7/1/2010 

Julie Rudowski
Assistant Director, Government Affairs

AUSA president: Don’t use pay and benefits for budget cutting. AUSA President Gen. Gordon R. Sullivan, USA, Ret., and the director of government affairs, Bill Loper, met with key lawmakers to discuss recent comments by Pentagon leadership on the defense budget.   

Sullivan told Sen. Daniel Inouye, D-Hawaii, chairman of the Senate Appropriations Committee as well as its defense subcommittee, Rep. Norm Dicks, D-Wash., chairman of the House Appropriations Defense Subcommittee, and Rep. Chet Edwards, D-Texas, chairman of the House Appropriations Military Construction Subcommittee, that he was concerned military pay and benefits, as well as increases in TRICARE fees and co-pays, might become the bill payers for presumed flat defense budgets in the future. 

Sullivan strongly believes that the Defense Department should expend greater effort on reducing health costs by eliminating inefficiencies in administration, contracting and procurement rather than looking first to beneficiaries. 

He also believes only Congress should have the authority to change health care fees and co-pays. He thanked Rep. Edwards for his leadership in sponsoring an AUSA-supported bill (H.R. 816) which would transfer that authority from DoD to Congress.

Sullivan followed up his visits with a letter to key members of both the House and Senate including Senate Majority Leader Harry Reid, Minority Leader Mitch McConnell, Speaker of the House Nancy Pelosi, Minority Leader John Boehner, as well as leaders of the armed services committees and appropriations committees. 

Sullivan outlined his concerns and reminded members: "We owe it to our brave service members – present and past – not to use their pay and benefits for budget-cutting target practice."

Bill would extend concurrent receipt and fix Medicare/TRICARE cut. As AUSA NEWS went to press, the full House was poised to vote on a bill (H.R. 4213) that would extend unemployment benefits and tax breaks but also includes two long-standing AUSA goals.  

A provision that would permit some military medical (Chapter 61) retirees with less than 20 years of service to collect retirement and Veterans’ Affairs disability pay concurrently for two years is included. 

Under the terms of the bill, Chapter 61 retirees deemed to be 90 percent to 100 percent disabled would receive both retiree pay and VA disability pay for fiscal 2011.  In Fiscal Year 2012, those with 70 percent to 80 percent disability would receive both benefits. According to congressional staff, the provision would only cover two years because that was all the offsets that could be found.

Another provision averts a scheduled 21 percent cut in Medicare/TRICARE physician payment rates and even allows rates to increase in 2012 and 2013 if spending growth on services "is within reasonable limits," with extra allowance for primary and preventive care. 

This is very good news except that as the bill heads to the House floor, it faces an uphill battle.  In addition to the concurrent receipt for Chapter 61 retirees and repeal of Medicare/TRICARE cuts, the legislation would extend expired tax cuts through 2010, and continue expanded unemployment benefits and health insurance subsidies for jobless workers. 

Only about 30 percent of the tax cuts and spending are offset with the rest designated as emergencies or exemptions from the pay-as-you-go law. 

Lawmakers are voicing concern about the cost of the bill in an election year when voters are paying close attention to the size of the federal deficit.  According to the Congressional Budget Office, the bill would increase the deficit by $133.7 billion over the next 10 years.

While concurrent receipt for Chapter 61 retirees is important, the most pressing matter is the provision that "fixes" the 21 percent cut in Medicare/TRICARE payments to physicians, which took effect on June 1. This will be the fourth time this year that doctors face a potential huge cut in the fees that the government pays them to treat Medicare and TRICARE patients.

AUSA will monitor this bill closely as it advances to the House floor. Developments will be provided in the "AUSA Legislative Update" found on our Web site www.ausa.org.